If both parents are living and they sell the house to one of their children can Medicaid come back when they have passed for repayment?

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Both parents would be going into nursing home.

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Most states have a 5 year look back. Any money they received will go to pay for their stay. If it doesn't, then there is a penalty where they won't receive Medicaid services. Call your local area agency on aging, they have staff that should be able to answer these questions.
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About “HCR vs. Pittas”, Pittas is NOT an elderly dementia mom in a NH & kids held by "Filial Responsbility" for payment situation.

For Pittas, the mom - MaryAnn (under 65) entered a HCR (Healthcare and Retirement Corporation of America) owned facility (Liberty Nursing & Rehab) after an auto accident for rehab. At Liberty from 9/07 – 3/08 (6 months / 92K bill, which is 15K a mo rehab cost). She applied for Medicaid & was “Medicaid Pending”. She was under 65 so NO MEDICARE. Then 3/08 she left rehab against medical advice. She left the United States and moved back to Greece (a citizen of) and left before completing the Medicaid application or lawsuit on auto accident. Now the son – upon being billed 92K for his mom’s care - took the situation to an arbitration hearing. (I bet arbitration was required to be done as per admissions contract.) In arbitration, it was ruled in the son’s favor. The son won - he did not have to pay the 92K. HCR appealed the arbitration ruling in son’s favor to a Pennsylvania trial court (judges only, no jury).

From WestLaw: “ As a result, on or about May 12, 2008, HCR instituted a filial support action against Appellant. Pursuant to 23 Pa.C.S.A. § 4603, entitled “Relatives' liability,” HCR sought to hold Appellant liable for the outstanding debt incurred as a result of his mother's treatment and care. The parties submitted the case to arbitration, whereupon a three-member arbitration panel found in favor of Appellant. HCR appealed the arbitration award to the trial court. The trial court held a three-day non-jury trial, after which it entered a verdict in favor of HCR in the amount of $92,943.41. Appellant filed post-trial motions, which the trial court denied on January 13, 2011."

In reading transcripts, my thought is that Pittas & his attorney did a poor job for the trial court - I'd bet they assumed "we won before so we will win again". He did not substantial his bills; did not provide documentation; did not join his father or his sisters for support-burden (if he had, his share would have been 23K - this is the biggest mistake imho); he did not provide documentation to show an attempt at completing the details & documentation needed for mom’s Medicaid application; or pursuing litigation on the auto accident; or bringing her back from Greece. HCR showed the trial court judge, that he had income; Pittas did not show other bills due. If the thought was that he did not have to do anything because he won in arbitration, that was a huge costly mistake.

Most NH situations are not going to be what Pittas was. They are going to be elderly & on MediCARE - so rehab is going to be paid 100% for 21 days and then 80% afterwards up to 100 days by MediCARE. The elder is going to have some $ to pay towards the bill; family is going to make an effort to pay something. If rehab is due to auto accident, your auto policy may pay for some of the costs & if not someone else’s auto insurance is gonna get sued & you are going to follow up on this. You are going to complete the Medicaid application for your parent. And Momma is not going to get up, leave rehab & take a flight to Greece to live!
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IF sold to one of the kids, it should be sold for whatever the last tax assessor value is for the land & improvements; & then parents use the $ for their care & needs and pay for NH from these funds; only then when the spend down is done can they apply & become eligible for Medicaid.

Many NH have limited # of Medicaid beds and the waiting list for those are from existing residents who have been at the NH private paying for a couple of years. Other NH have Medicaid beds available from day 1. Some NH take NO Medicaid.
NH run between 5K - 12K a mo EACH, so put pen to paper to see where they are likely to run out of funds and need Medicaid. Couple in NH as private pay, I'd say they need 500K to make 2.5 - 3 year average stay in NH. The costs are staggering.

If the property in reality is worth less than the current assessor value, you need to get a licensed registered appraisal of the house done (costs vary, maybe $ 500) & hopefully it shows less value. Then that lower amount should be ok for Medicaid (so no gifting or transfer penalty issues). Appraisal needs to be done by a pro - you can't use Realtor listing price or comps on other property in neighborhood.

If both parents are going into NH at the same time, all will be somewhat easier paperwork for Medicaid. But if dad is going into NH and mom staying @ home as the community spouse, well then it's quite a bit different Medicaid maze to get through as mom becomes the "community spouse" with it's different asset limits
and CSRA/MMNA set up. If one is going to stay in the house, I'd really suggest that before you do anything that you & your parents go see an elder law attorney - perhaps one that is NAELA or CELA, to review planning for both. Good luck.
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If they sell you a $200,000 house, of course you get a mortgage, and the $200K money from the sale goes to mom & dad. They have to spend that down to get back onto Medicaid.
Now let's say they go into a Nursing Home, sell you the house for $100 and apply for Medicaid. Medicaid sees the sale, it's public record! So Medicaid won't pay a dime. The Nursing Home will sue you and win, because they will allege "hidden assets" and "filial responsibility". See HCRC v. John Pittas.
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Well, it isn't exactly repayment. If it is in the last 5 years, your folks wouldn't be eligible for medicaid until they have been in the nursing probably a few years, depending on the worth of the house. If they have money from a house sale, the 5 year look back by medicaid, will want that spent first.
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If parents sell the house (to anybody) and the proceeds are used for their care before they apply for assistance like Medicaid, I don't believe that there would be any Medicaid recovery. However, they must sell the house for fair market value.
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